Walgreens Aims to Become Consumers' First Source for Health & Daily Living

DEERFIELD, Ill. -- Walgreens has more on its agenda than being America's largest retail pharmacy chain. It's now looking to be an all-in-one, primary care provider.

In an interview with Fortune Magazine, Greg Wasson, CEO of The Walgreen Co., spoke about the company's expanding role beyond front-end convenience.

"We have a tremendous opportunity to differentiate ourselves and step out of the traditional drugstore format and create something completely new and unique," said Wasson. "In the past, we were a pharmacy with a front end that had convenience goods. We don't want to lose that. We're on the best corners of America for that reason. But we can move from just convenience to more health, daily living and beauty."

The chief executive pointed to Walgreens' recent efforts to expand its fresh-food offering, and the trust that consumers place in the brand.

"I love the statistic that 60 percent of the people in this country responsible for tonight's meal do not know what it is at 10 a.m.," he said. "So, if we're already trusted to provide medications and we've been selling milk, bread and eggs, there's no reason we can't extend into fresh food -- tonight's meal. It's being very well-accepted."

As CSNews Online previously reported, Walgreen's Up Market fresh food concept is currently available at a handful of Duane Reade and Walgreens locations. Further expansion of the concept is planned for the future as the retailer tries to make a name for itself as a good place to get a meal, snack or beverage.

In March, the convenience store competitor opened its first flagship store in Washington, D.C., featuring hundreds of fresh food items including produce and high-quality, on-the-go meal options such as wraps, sandwiches and salads. The store also has an Up Market Café, with a barista preparing fresh-brewed premium coffee and espressos, as well as a juice and smoothie bar featuring fresh fruits and vegetables included in distinct recipes.

Walgreens' expansion is not necessarily a sign that there haven't been financial bumps along the way. Asked about the company's reported decrease in front-end traffic for the 20th consecutive month, Wasson cited a shift in marketing dollars from paper to digital media, as well as the launch of its loyalty program. The CEO reported that the company is investing "more prudently and intelligently to drive traffic."

When asked about trends he has noticed over the past few months, Wasson said consumers are focused on value for their money and are spending their paychecks within a tighter cycle. Thus, Walgreens will continue to offer more of its private label products and aim to become the go-to retailer for consumers.

"We think we have an opportunity to provide real value, especially with quality of our brand and the trust that people have in our brand," the CEO concluded.